RBI intervention shields rupee from record low after Trump tariff threat
The rupee closed at 87.8000 to the U.S. dollar, down 0.2% from Monday's close of 87.6550. The local currency fell to a low of 87.8850 on Tuesday, just shy of an all-time low of 87.95 hit in February.
The Reserve Bank of India helped absorb some tariff-related pressure on the rupee through interventions conducted by state-run banks, a trader at a state-owned lender said.
U.S. President Donald Trump on Monday again threatened to substantially raise tariffs on Indian goods, citing the country's continued purchases and resale of Russian oil, after announcing a surprise 25% tariff on Indian imports last week.
In response, India's foreign ministry said it would take "all necessary steps" to protect national interests and economic security, escalating a trade row between the two countries.
"As fears of more expensive crude oil loom, the Indian rupee stands at a crossroads amid rising geopolitical tensions," said Abhishek Goenka, chief executive of IFA Global.
Traders and analysts said that persistent foreign outflows may accelerate, putting further strain on the rupee if talks stall.
The RBI's interest rate decision on Wednesday could also influence the currency's trajectory.
Meanwhile, Asian currencies traded mixed as the dollar recouped some of its losses on Tuesday. The Philippine peso dropped 0.6% after inflation hit the lowest in nearly six years. The Malaysian ringgit gained more than 0.2%, while the Indonesian rupiah was little changed.
The dollar index was down 0.3% at 98.967, as of 1007 GMT.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
9 minutes ago
- Reuters
Vietnam July exports up 16% y/y, industrial production up 8.5%
HANOI, Aug 6 (Reuters) - Vietnam's exports in July rose 16% from a year earlier to $42.27 billion, while industrial production increased by an annual 8.5%, government data showed on Wednesday. Imports in July rose 17.8% to $40 billion, resulting in a trade surplus of $2.27 billion for the month, the National Statistics Office said in a report. For the first seven months of this year, exports rose 14.8% over the same period of 2024 to $262.44 billion, while imports were up 17.9% to $252.26 billion, translating into a trade surplus of $10.18 billion. The government said on Monday that imports and exports both increased sharply because firms were ramping up production to meet new orders. Goods from Vietnam, a regional manufacturing powerhouse, have been slapped with a 20% tariff in the United States by the Trump administration. The United States was Vietnam's largest export market over the January-July period, with shipments totalling $85.1 billion, the NSO said. China was Vietnam's largest source of imports, with a value of $101.5 billion. Consumer prices in July rose 3.19% from a year earlier, the NSO said, adding that retail sales in July were up 9.2%.
Reuters
9 minutes ago
- Reuters
TPG to buy Australian automotive software firm Infomedia for over $420 million
Aug 6 (Reuters) - Australia's Infomedia ( opens new tab said on Wednesday it had agreed to be acquired by the Asia-focused private equity arm of asset manager TPG (TPG.O), opens new tab for an equity value of A$651 million ($421.33 million). Under the deal, shareholders in the ASX-listed firm would receive A$1.72 per share, reflecting a more than 30% premium as compared to the stock's closing price on Tuesday. Infomedia shares rose nearly 28% in early trade on Wednesday to reach A$1.6875, their highest level since September last year. Infomedia provides "software as a service" (SaaS) solutions for the global automotive and motor service sector, offering clients data-driven solutions. It counts global carmakers BMW ( opens new tab, Audi, and Cadillac among its customers, according to its website. The A$1.72 per-share offer sits close to what was offered for the firm back in 2022 by potential suitors from the United States. The cash consideration reflects an enterprise value of A$579 million, the company said, adding that its board had endorsed TPG's bid. TPG Asia co-head Joel Thickins said Infomedia would join the private equity fund's existing global software investments worth $24 billion in firms including Wind River and McAfee. Infomedia is also allowed to pay its shareholders a fully-franked dividend of up to 2 Australian cents per share for fiscal 2025 and a further special dividend of up to 2.9 Australian cents apiece. The deal needs Foreign Investment Review Board's (FIRB) approval and Infomedia said a shareholder vote should be held by mid-November. ($1 = 1.5451 Australian dollars)
Reuters
39 minutes ago
- Reuters
Asian shares track Wall Street lower, dollar rangebound
SYDNEY, Aug 6 (Reuters) - Asian shares slipped along with Wall Street on Wednesday, after weak U.S. data highlighted the damage tariffs were having on economic activity and earnings, while the dollar struggled with the drag from lower bond yields. U.S. services sector activity unexpectedly flatlined in July, data showed on Tuesday. Employment further weakened and input costs climbed by the most in nearly three years, underscoring the impact from President Donald Trump's tariff policy. Second-quarter earnings results also revealed pressure from Trump's tariff wars. Taco Bell parent Yum Brands (YUM.N), opens new tab missed expectations as steep trade duties dent consumer spending, while Caterpillar (CAT.N), opens new tab warned that U.S. tariffs would cost it up to $1.5 billion this year. "It paints a picture of a stagflationary dynamic, which although still far from truly coming to fruition, raises the risk of a toxic mix of rising joblessness and prices as tariffs filter through the U.S. economy," said Kyle Rodda, senior analyst at MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab slipped 0.2%, while Japan's Nikkei (.N225), opens new tab eked out a small 0.2% gain. Both Chinese blue chips (.CSI300), opens new tab and Hong Kong's Hang Seng index (.HSI), opens new tab were flat. Nasdaq futures fell 0.3% and S&P 500 futures eased 0.1%. Trump on Tuesday said it would announce tariffs on semiconductors and chips in the next week or so, while the U.S. would initially impose a "small tariff" on pharmaceutical imports before increasing it substantially in a year or two. He also said the U.S. was close to a trade deal with China and that he would meet his Chinese counterpart Xi Jinping before the end of the year if an agreement was struck. However, he threatened to further raise tariffs on goods from India over its Russian oil purchases. In currency markets, the dollar consolidated after sliding from two-month highs last Friday on a weak jobs report that had markets price in a near-certain chance of a Federal Reserve interest rate cut in September. The dollar index , which measures the U.S. currency against six counterparts, was flat at 98.821 and was up 0.1% this week after Friday's 1.4% fall. Fed funds futures imply a 94% chance of a rate cut next month, with at least two cuts priced in for this year, according to the CME's FedWatch. Investors are waiting for Trump's pick to fill a coming vacancy on the Federal Reserve's Board of Governors. Trump said the decision will be made soon, while ruling out Treasury Secretary Scott Bessent as a contender to replace current chief Jerome Powell, whose term ends in May 2026. Treasury yields edged up overnight after a $58 billion auction of three-year notes went poorly, but still hovered near multi-month lows. More supply will hit the market this week with $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday. Two-year Treasury yields rose 1 basis point to 3.7284%, having risen 3.5 bps overnight, while benchmark 10-year yields ticked up 2 bps to 4.2198%, after holding steady overnight. In commodity markets, oil prices edged up after four straight sessions of declines. U.S. crude rose 0.2% to $65.3 per barrel, while Brent was at a one-month low of $67.78 per barrel, up 0.1%. Trump said on Tuesday he will decide on whether to sanction countries who purchase Russian oil after a meeting with Russian officials scheduled for Wednesday. Spot gold prices were flat at $3,381 an ounce.
